SIOUX FALLS, S.D. (KELO) — Doug Sombke has met with many politicians and government officials since he started farming in 1980.
His latest trip to Washington D.C. has left the President of South Dakota Farmers Union hopeful for meaningful action to aid farmers, producers and rural America. Sombke, who manages corn, soybeans and cattle over 2,500 acres near Conde in Spink County, was one of 44 South Dakotans who spoke directly with U.S. Senators, U.S Representatives and government officials with the Surface Transportation Board, Commodity Futures Trading Commission, Department of Justice and Federal Trade Association.
“It was really, really good that we connected with them, because they had not heard directly from farmers and ranchers like that,” Sombke said. “We felt that there was a lot more response to what we were presenting and what we’re asking.”
With midterm elections approaching, Sombke said he understands the political divide will still make action difficult, but he was encouraged by the amount of interest shown for agriculture and rural Americans. He specifically said elected officials without many ties to the agriculture industry were concerned about how the issues impact consumers in their home states and districts.
“It’s good for the consumers, too,” Sombke said. “You know what it’s like to go to the grocery store. The sad thing is farmers are not even getting 7% of that back.”
Sombke said one of the most “eye-opening” meetings came with members of the DOJ’s antitrust division. He noted in many agriculture industries, including the cattle and beef industry, 30 and 40 years of consolidation has harmed fair competition. In the U.S., 26 major plants process 80-85% of the beef in the USA. Those plants are owned by four main companies — JBS, Tyson, Cargill and National Beef.
“In the antitrust division, they basically admitted to us that they’ve dropped the ball,” Sombke said. “Businesses should not have been allowed to consolidate like they have over the years. We’ve let the competitive spirit of America be drawn away and be whipped into shape by consolidation.”
In December 2021, a White House economic analysis showed the major meatpackers saw profit margins jump 300% during the COVID-19 pandemic. Consumer prices for beef also skyrocketed, but at the same time, cattle prices dropped. In a meeting at the White House in early January, President Joe Biden said farmers and ranchers have had to pay “whatever these four big companies say they have to pay, by and large.”
Sombke said lawyers and economists sitting in meetings visibly reacted to hearing stories from South Dakota producers.
“When they heard our stories directly from people’s mouths, and the ramifications of what was happening to some of these people that have testified in the past,” Sombke said. “They were basically shunned. They were told we’re not going to buy cattle from you anymore. You’re gonna get a lower price, those types of things, and it’s happening, it’s actually happening.”
Action on antitrust
On Tuesday, Assistant Attorney General Jonathan Kanter testified in front of the Senate Judiciary Committee hearing on competition policy, antitrust and consumer rights. Kanter was one of the officials who met with members of the National Farmers Union and highlighted a civil antitrust lawsuit against a human resource consulting company, its president and three chicken processors.
“The Antitrust Division worked together with USDA to create a complaint portal (Farmerfairness.gov), that accepts complaints about potentially anticompetitive practices in the meat and poultry industries that harm farmers and increase prices for consumers,” Kanter told Senators Tuesday. “The agencies meet periodically to address the complaints received through the portal. The agencies have received over 100 complaints to date and we are hard at work investigating.”
Sombke said there’s a lot of wrongs that need to be fixed, but the best attempts need to happen first. He believed the lawsuit involving the poultry industry was a good start.
“It really was the first one that led to all of this,” Sombke said. “That industry has just deteriorated as far as family farmers and ranchers go.”
Sombke said farmers and ranchers have reached the breaking point and noted how many diversified farms have been lost over the years. He recalled how many farms used to all have some hogs, some sheep, some cattle and some chickens.
“That’s not the case anymore. Everyone’s consolidated. We were concentrated on one industry,” Sombke said. “That’s not good. It’s not good for the consumer, it’s not good for us as communities and it’s not good for our soils that we were operating on either.”
More meatpacking options
Sombke said he’s been happy with the USDA’s funding for new meat processing centers. He said that’s been a good change but at the same time getting shelf space in local stores can be challenging for smaller meat processing facilities.
“Unless you can be on the shelf, it’s hard to market and hard to compete,” Sombke said. “Hy-Vee has an exclusive hog product coming from Smithfield. No one else. I’m not trying to slam Hy-Vee but that’s the kind of thing that we have to deal with.”
Sombke also said he’s had conversations with Megan Kingsbury, who has announced intentions to build a 8,000-head a day cattle meatpacking plant in southern Rapid City. Sombke said he said it’s good to see someone dream big and try to accomplish a change to the industry.
“At that scale, she can provide an All-American product,” Sombke said. “That’s the difference between these other big four, they don’t, they’re not and they’re not geared that way.”
Sombke said Farmers Union has worked with Kingsbury on the rendering process for a possible meatpacking plant.